Constitutional Court lets local governments off the leash

July 4, 2017

The Minister of Home Affairs Tjahjo Kumolo no longer has the legal authority to revoke problematic local regulations. Photo by Akbar Nugroho Gumay for Antara.

Decentralisation reforms enacted following the fall of Soeharto gave local governments unprecedented powers to govern their own affairs, including by issuing bylaws, commonly called perda (peraturan daerah). But the absence of workable review mechanisms – ways to cancel bad perda – has given local governments carte blanche to enact laws of virtually any subject matter they want, with only a few exceptions.

And although they have barely featured in the national media, two recent Constitutional Court decisions weaken review mechanisms even further. By stopping the central government from cancelling bad perda, they have let local governments off the leash. This spells serious trouble for legal certainty and the rule of law in Indonesia. There is now very little that anyone can do to halt the operation of perda that violate the Constitution, or other national laws.

The ability of local governments to pass bylaws might be a positive development where national level laws have been lacking (for example, where national laws lacked human rights protections or hampered trade across regional borders). They can also be good if local politicians are concerned with passing laws to further their constituents’ interests, such as by making advances in areas such as health, education and environmental standards. Many local politicians are indeed well-intentioned and professional, and there are numerous examples of progressive local governments passing regulations that really do improve the welfare of local people.

But many other local lawmakers are incompetent, self-interested or corrupt. They have produced bylaws criticised for being predatory, discriminatory or illegal. The largely unchecked local lawmaking power has also led to serious inconsistencies between the laws enacted by the various tiers of government. For example, the National Commission on Violence Against Women (Komnas Perempuan) conducts annual reviews of local regulations and identified 421 perda that discriminate against women and minorities between 2009 to 2016.

Until recently, the national government had the power to cancel regional perda through the Ministry of Home Affairs – the ministry with the authority for administering regional autonomy. At the provincial level, governors could revoke laws passed by district (kabupaten) and city governments.

Unfortunately, the Ministry has too often failed to review local laws for compliance with national laws, including national human rights norms. In fact, it has almost exclusively reviewed and invalidated perda that seek to raise revenue (presumably to safeguard central government revenue flows and promote an attractive investment environment).

In June 2016, for example, President Joko Widodo announced that the Ministry had annulled 3,143 local regulations, primarily because they were considered to impede investment. This means that perda with other subject matter have escaped invalidation even if they contradict central government laws or the public interest.

As mentioned, in early-mid 2017 the Constitutional Court, in two different decisions, invalidated provisions in the 2014 Law on Local Government, under which provincial governors and the central government could review and invalidate perda after their enactment.

The first case was brought by more than 40 district governments and the Indonesian Association of District Governments (Apkasi). They disputed various provisions in the 2014 Law, including sections in Article 251 that allowed governors to invalidate city and district laws that breached higher level laws, the public interest or morality. They claimed these provisions were unconstitutional for two reasons: first, they violated the rights of subnational governments granted by Article 18 of the Constitution; and, second, because bureaucratic review usurped the judicial review function of the Supreme Court.

A majority of the Court accepted this second argument, saying the function of governors and the minister was the same as ‘judicial review’, which, under the Constitution, could only be performed by the Supreme Court. The Constitutional Court added that gubernatorial decisions lacked sufficient authority to invalidate city or district perda.

This decision was legally questionable for many reasons. For one, Patrialis Akbar, former Minister for Justice and Human Rights, was included on the nine-judge panel hearing the case, participating in a judge’s meeting about the case on 20 August 2016. But by the time the court met again on 2 February 2017 and 30 March 2017 to discuss the case again, he had been suspended and was being prosecuted for taking a bribe to fix the outcome of another Constitutional Court case. Yet without Patrialis and his vote, the Court would have been split four judges to four. If the Court had considered itself to be split (as I believe it should have), the chief justice should have the casting vote according to the Law on the Constitutional Court. Yet, in this case, Chief Justice Arief Hidayat was in the minority.

A few months later, the Court handed down a decision of similar effect – but this time concerning provincial perda. The Court applied its reasoning in the earlier case to invalidate provisions of the 2014 Law that allowed the minister to invalidate them by Ministerial Decree.

Now that the minister can no longer review any perda there remain just two ways to cancel them. The first is to enact a higher-level law (such a House of Representatives statute) to revoke the perda. Unfortunately, this does not directly remove the perda from the books, and there is a risk that local administrations might continue to apply it, in direct contravention of national law.

The second is to ask the Supreme Court to review the perda for consistency with “higher-level” laws, including national laws. But this is a highly unpredictable path.

The precise scope of the Supreme Court’s judicial review powers is unclear and even those conflicts that clearly do fall within its jurisdiction have rarely been resolved convincingly. Generally speaking, the Supreme Court’s reasoning in judicial review cases is simplistic and superficial. In many perda review cases, the Court has not discussed the substance of the relevant bylaw, the arguments of the parties, or even whether the bylaw contradicts any higher laws. In other words, the Court has been reluctant to openly consider the “merits” of the case. In some cases, it has been content simply to declare that the perda is regional in scope and within the jurisdiction of the relevant local government “on the basis of regional autonomy”.

In the eyes of the Supreme Court, regional governments have a broad discretion to pass laws to implement almost any policies, and this means they will rarely cancel one, unless the perda affects national government finances. And that means there is now little chance any perda will be cancelled.

Regional autonomy has posed significant challenges to Indonesia’s legal system, most of which it has failed. Granting wide lawmaking powers to subnational governments has resulted in a proliferation of lower-level laws, which many commentators have criticised. Some perda are unworkably unclear, meet no apparent regulatory need and were not preceded by any public consultation. The removal of post-enactment bureaucratic review and the weaknesses of judicial review mean that most of these laws will remain on the books. Unfortunately, this means that the legal uncertainty they bring also remains.

The two new Constitutional Court decisions will probably only make a bad situation worse.

Professor Simon Butt is a senior associate of the Centre for Indonesian Law, Islam and Society. He is also an ARC Future Fellow and associate director for the Centre for Asian and Pacific Law at The University of Sydney.